U.S. oil drillers add rigs in longest streak in 5 years -Baker Hughes

Reuters Staff

3 Min Read

Sept 9 (Reuters) - U.S. drillers this week added oil rigs
for a tenth week in the past 11, according to a closely followed
report on Friday, the longest streak of not cutting rigs since
2011.
After falling 206 rigs in the first half of the year, the
rig count has increased or held steady every week so far this
quarter. The rig count plunged from a high in October 2014 after
crude prices collapsed in the biggest price rout in a
generation.
Drillers added seven oil rigs in the week to Sept. 9,
bringing the total rig count up to 414, energy services firm
Baker Hughes Inc said. RIG-OL-USA-BHI
That is well below the 652 oil rigs active during the same
week a year ago, but is up from the recent bottom of 316 rigs
seen in May.
U.S. crude futures were on course to rise about 4
percent this week on hopes for a global deal on stabilizing
crude output after Saudi Arabia, the leading oil producer inside
OPEC, and Russia, the biggest producer outside the group, agreed
on Monday to cooperate in oversupplied markets.
On Friday, U.S. crude was trading at above $46 a barrel,
close to the $50-mark that analysts and drillers say makes
drilling more viable. Futures for calendar 2017 were
trading over $50.
"We anticipate slow rig growth with all of the usual price
caveats," said James Williams, president of energy consultant
WTRG Economics in Arkansas.
"If oil prices continue to rise, the rig count will continue
to rise and U.S. production will stop declining and start to
increase," Williams said, noting there is typically a two-month
lag between prices increasing and rigs entering service.
More than two-thirds of rigs added over the past two months
were located in the Permian basin in west Texas and eastern New
Mexico.
Williams forecast those new rigs would help boost Permian
production by about 3,000 barrels per day in September and about
18,000 bpd in October, which should bring production in the
basin to about 2 million bpd.
U.S. oil and gas exploration and production company Apache
Corp this week said it made a significant discovery in
the Permian containing an estimated 3 billion barrels of oil and
75 trillion cubic feet of gas.
(Reporting by Scott DiSavino; Editing by Marguerita Choy)